FTC and 22 states sue Amazon over alleged ad pricing practices

The U.S. Federal Trade Commission, together with 22 states, filed a lawsuit on Monday in the Western District of Washington alleging that Amazon.com raised the minimum price required for advertisers to place product-promotion ads, resulting in higher auction costs for advertisers. The complaint claims the practice cost advertisers at least $20 billion and generated additional profit for Amazon.

"Amazon has been able to generate billions of dollars in profits — at the expense of its auction advertising customers," the FTC said in the filing.

The FTC says advertisers suffered significant financial harm and that the states may seek civil penalties and restitution. Amazon responded in a blog post, stating that its advertising policies are designed to deliver the most relevant ads to shoppers and that the average cost per click for advertisers has remained flat from 2019 to 2024 while sales from those clicks have increased.

"Amazon’s approach to pricing contradicts any suggestion of consumer harm. We provide customers the lowest prices every day across the widest selection of products, and work to ensure our retail and grocery prices meet or beat those offered by other retailers," the company said.

The lawsuit follows a settlement reached in September last year, in which Amazon agreed to pay $2.5 billion in fines and reimbursements to Prime members over separate FTC allegations. Amazon’s shares fell about 3 % in afternoon trading after the filing.